Acorn Holdings Corporate Green Bond

Acorn Holdings Corporate Green Bond

Project Overall Goal

The security, a five-year project bond, was intended to fund the construction of six purpose-built, student accommodation properties in Nairobi, Kenya.

Executive Summary

In October 2019, Acorn Holding Limited issued the first corporate green bond in Kenya and East Africa. The real estate development and management company raised ~$36M to develop a six-building dormitory project to house 5,000 students in Nairobi. The five-year project bond was used to build projects that were benchmarked against International Finance Corporation EDGE Platform (Excellence in Design for Greater Efficiencies) for water use, energy efficiency and low embodied energy in building materials, with the aim of achieving low operational utility costs and low carbon impact to the environment in the long term. Sophisticated investors were offered a senior, secured, rated and guaranteed bond under the Green Bonds Program-Kenya (GBPK). Stanbic Bank Kenya and SBG Securities served as advisors to the transaction. The Green Bond, issued by Acorn Project (Two) Limited Liability Partnership, was a fixed rate, five-year variant. It was a senior, secured, rated and guaranteed issue. The funding structure was hinged on an upfront commitment with deferred drawdown schedule. Priced at a fixed rate of 12.25 percent per annum, the Acorn Green Bond has a five-year tenure, with an early redemption clause at the issuer’s option, with land and developments thereon being the principal security. The issue was issued under the private sector-led Green Bond Programme – Kenya. It aims to promote financial sector innovation by developing a domestic green bond market, is brought together by the Kenya Bankers Association (KBA), Nairobi Securities Exchange (NSE), Climate Bonds Initiative, Financial Sector Deepening (FSD) Africa and FMO – Dutch Development Bank. The program has also benefited from technical support and guidance from the International Finance Corporation (IFC), the World Bank private sector wing and World Wildlife Fund (WWF)-Kenya. Stanbic Bank Kenya acted as arranger.

Project Details

Sector:  Real Estate
Tags:  Africa, Low Middle Income Countries, Mitigation, non-blended instruments
Source of Capital:  Private Institutional Investors and Asset Managers Philanthropy, private donors and impact investors
Project URL:  Download PDF

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